Howard University's faculty physician practice is cutting its ties with George Washington Medical Faculty Associates, shrinking the city's dominant doctor contracting group by nearly one-fifth.
Howard's approximately 180 specialists have told the GW group that they will not renew a management contract when it expires in December, both parties confirmed. The deal has been in place since 2008, said Steve Badger, the CEO of Medical Faculty Associates.
Once the deal ends, Howard's doctors will again negotiate with insurance companies or health plan administrators as a separate unit, a rare step back from the nationwide drumbeat of medical consolidation.
Currently, insurance companies have to negotiate with the Howard and GW physicians as a single, 950-doctor entity, which gave Medical Faculty Associates extraordinary power to command favorable prices in negotiations with any insurer in the region. It will shrink to about 770 doctors now.
"The MFA will still be the largest physician group in the region by far, and the opportunities in front of us are significant," Badger said, foreshadowing possible new alliances or acquisitions that could replace some of the lost clout and revenue from Howard.
In a statement, Howard spokeswoman Kerry-Ann Hamilton said executives decided to bring physician management in-house after an annual evaluation.
The GW doctor's group is legally independent from its namesake university; the Howard group is not.
Badger defended his group's record in managing the Howard practice, noting that revenue more than doubled under control of the GW group.
Howard, already struggling with big losses at its hospital and facing a controversy within its board of directors, will have to spend heavily to replace services GW had provided, such as electronic record-keeping software, back-office staff and insurance contract negotiations.
Ben Fischer covers health care and law.
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